The real reason Goldman Sachs is eyeing Frankfurt: chaos in London?

As we observed after the British election two weeks ago, one of the big risks of all the political turmoil in the UK is the likelihood that - Brexit or not - U.S. banks decide that Britain doesn't represent a stable base in Europe any more. After all, Morgan Stanley has around $494m of assets in its European business; Goldman Sachs has around $850bn. That's a lot to have sunk in a country where political stability seems to be a thing of the past.

In his comments to German media at the weekend, Richard Gnodde, president of Goldman Sachs International, seems to have subtly made precisely that point.

Gnodde didn't explicitly criticize British instability. Instead, he strongly praised German political stability.

Speaking of German chancellor Angela Merkel, Gnodde said, "The German chancellor has proved she is a very trustworthy, very stable, very strong leader. - And she's done this for many years, through several crisis."